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Finance Options for Personal Funding Needs

Personal financial fortunes ebb and flow, alongside earnings and spending. In an ideal world, the flow of cash through your household is enough to cover spending obligations, without taking extraordinary measures. At times, however, financial commitments exceed income, or unexpected expenses change your status. Fortunately, there are a variety of options available for those needing funding. And while each case is unique, people share some of the same money concerns.

Regardless of what brings you to the bank, it is important to answer a few questions before making borrowing commitments. By first defining your needs, your search for financing is more direct and focused on the types of loans best suited to your circumstances.

How Much Money do You Need?

A crucial first step toward needed financing is determining exactly how much you intend to borrow. When money is required for a specific one-time purchase, like a home, settling on the correct type of funding is relatively easy. Mortgages are designed exclusively for funding real estate buys, so they are structured for long-term payback at low rates. Qualifying for conventional home loans requires good credit, but there is no better method for financing a property purchase.

In other cases, the best funding approach is not clear-cut. Buying a car, for example, could be accomplished with the help of a personal loan, guaranteed by your employment income. Such personal loans require the same type of credit evaluation typical imposed by mortgage lenders, but they are structured as short-term debt, to be repaid within a few years. Without a strong credit rating, you may struggle to convince banks and credit unions to issue a conventional individual loan.

Do You Have Good Credit?

In addition to the size of a loan, it is essential to consider how much risk you present to lenders. To evaluate creditworthiness, lenders assess your employment and residential histories, as well as financial details from your past. Applicants with steady salaries and strong credit references are less risky to banks, so they have access to the best interest rates and loan terms. Borrowers with credit challenges on their records may not be excluded entirely, but their options may be limited when compared to those with perfect credit histories.

Applicants with limited references or negative entries on their credit records may be able to boost their credit strength using a unique loan program offered by some lenders. Guarantor loans are made with the help of another party willing to lend his or her credit power to your application. To help you qualify, your cosigner’s credit score is considered alongside your own, furnishing an additional layer of security for lenders. In most cases, your guarantor doesn’t participate with repayment or use of the loan proceeds – he or she is there only to secure funding for you. If you fail to repay your loan, however, the guarantor is equally responsible for the outstanding debt, so banks will not hesitate to pursue collections.

Is Borrowing the Best Approach?

Household expenses cover a wide range of costs, from must-haves like food and shelter, to discretionary spending on recreation and entertainment. When customary cash flow is not enough to cover a particular expense, it should be evaluated to determine the best funding approach. Can it wait? Or are financial resources required immediately? By deferring spending and saving for a specific purpose, you may be able to avoid financing and origination fees tied to commercial loans.

Unexpected financial needs requiring quick cash can be hard to manage, because options are limited for those without savings on hand. If the need is short-term and repayment is expected within weeks, a payday loan presents a fast funding alternative, which can be processed quickly, without a formal credit check. Eligibility is based on steady employment, so your anticipated paycheck is used as collateral for this type of funding. Timely repayment is essential when committing to short-term financing, because costly penalties are imposed on those unable to meet payment terms.

Cash on hand is insufficient, at times, so consumers turn to various forms of financing. To settle on the best available funding, first evaluate your needs, accounting for your credit standing and personal resources. Once your goals and alternatives are clear, weigh the benefits of short and long-term options, before committing to the most appropriate loan solution.

Be the first to comment - What do you think?  Posted by FinanceDad - July 7, 2015 at 1:30 pm

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How do taxes work and other FAQ, so easy a kid could understand

For most people, filing taxes is a simple matter of putting a bunch of numbers into TurboTax, finding out they get some money back, and not giving it a second thought. In this post I hope to explain the basics of the US federal income tax system in simple terms as it applies to most people and list a few FAQs about taxes.

If you see something that isn’t correct or have suggestions on other things to add, please let me know in the comments or by private message. Be sensitive that this is intended as an overview and not line-by-line instructions on how to file one’s taxes. For detailed tax questions you should see a tax professional.

ELI5: Taxable Income, Tax Brackets, Marginal Tax Rates

The biggest point of confusion for a tax novice is how the tax brackets affect their tax burden. Your marginal tax rate and your effective tax rate are not the same thing. Moving into a higher marginal tax bracket does not mean your entire income is taxed at that rate.

The marginal tax brackets for 2013 are listed here (2014). I will use the single filing brackets for illustrative purposes (I also didn’t include deductions for this initial example).

Say you’re a single filer that has $34,000 in taxable income (taxable income is explained more in-depth later). Your boss calls you in and tells you that you’re getting a raise to $40,000 per year! Great! But… how does this affect your taxes? At $34k you’re just under the cutoff for the 25% tax bracket, and now your marginal tax rate is 25% after the raise. Are you really “making” more money, but losing virtually all of it to the increased tax burden?

No. Since the tax brackets are marginal, based on the marginal tax rate (the tax rate at which the next dollar you earn is taxed), only the amount above the 25% bracket threshold ($36,901) is taxed at 25%. Your tax calculation looks like this:

  • $8,925 at 10% = $892.50 ($8,925 in taxable income)
  • $27,325 at 15% = $4098.75 ($36,250 – $8,925 in taxable income)
  • $3,750 at 25% = $937.50 ($40,000 – $36,250 in taxable income)
  • Total tax = $5,928.75, effective federal rate = 14.8%

The marginal tax rates only apply to taxable income – that is, your income after all of your deductions and exemptions are factored into your total income. Your total income is listed in line 22 of the 1040 form, while your taxable income is listed in line 43 of the 1040.

Deductions: Standard, Itemized, above the line – WTF?

Everyone is entitled to deduct certain things from their taxes. Deductions reduce the amount of income that is subject to tax – they reduce your taxable income. Deductions fall into three major categories: the standard deduction, itemized deductions, and “above the line” deductions.

  • The standard deduction in 2013 is $6,100 for single filers in tax year 2013 ($6,200 for 2014). If you claim the standard deduction, this is what you’d put in line 40 of Form 1040.
  • If you want to claim itemized deductions, of which a number of expenses qualify, you need to include Schedule A with your tax filing. The total of your itemized deductions goes in line 40 of the 1040 form. The major itemized deductions are for home mortgage interest, state/local/property taxes, and charitable donations.
  • “Above the line” deductions are listed in lines 23-35 of the 1040. Most require additional documentation to show eligibility. In /r/personalfinance the most popular tend to be the student loan interest deduction (line 33) and the IRA deduction (line 32).

One of the most common tax questions we get here is “Should I itemize my deductions or just take the standard deduction?” If the sum of your itemized deductions is not larger than the standard deduction, you’re almost always better off claiming the standard deduction.

Now let’s go back to our simple example from before. Taking into account the standard deduction and one personal exemption for a single filer, the tax calculation changes significantly for the better:

  • $6,100 + $3,900 = $10,000 subtracted from your taxable income.
  • $8,925 at 10% = $892.50 ($8,925 in taxable income)
  • $21,075 at 15% = $3,161.25 ($30,000 – $8,925 in taxable income)
  • Total tax = $4,053.75, effective federal rate = 10.1%

Notice that the standard deduction and personal exemption put you in the 15% marginal tax bracket instead of the 25% bracket.

Your state may offer its own tax deductions for state taxes. Details vary by state, but one of the most valuable is the deduction for 529 plan contributions if your state offers it.


In addition to deductions, most taxpayers are entitled to claim one or more tax exemptions. Exemptions, like deductions, reduce your taxable income. The personal exemption is $3,900 for 2013 ($3,950 for 2014). If you are married filing jointly you can claim an additional exemption for your spouse. You can also claim an additional exemption for each dependent.

High income individuals and couples may run into the phaseout thresholds for the exemption(s) they claim. For more, see IRS Publication 17.

Tax Withholding

Your employer is required to withhold taxes from each of your paychecks by law. The formula for withholding can be found in IRS publication 15. You can adjust your withholding by giving a new/modified W-4 form to your employer. The W-4 allows you to specify the number of allowances or extra withholding from your paycheck.

The IRS also provides a somewhat useful withholding calculator that can help you determine if you are withholding too much or too little from your paychecks. The calculator is good if you have a regular salary that doesn’t change much throughout the year.

Tax “refunds” – Not Ideal

Your tax filing calculates your actual tax obligation to what you’ve had withheld throughout the year. If you underwithhold, you will owe the IRS the difference. Beware that if you purposely underwithhold too much, you may face a penalty.

If your tax obligation is less than what you’ve had withheld throughout the year, the difference is returned to you as a “tax refund.” While it may seem counterintuitive, tax refunds are not a good thing. “Refund” implies that you actually owed the money you paid at some point – this is not the case. Money that you never owed was being held by the government at 0% interest. Instead of working for you throughout the year by paying down debt or funding your retirement accounts, your money was effectively doing nothing for anyone. Aiming for as small a refund as possible, or even owing a small amount, is highly advisable. You can do so by adjusting your allowances on your W-4.

Tax Credits

Tax credits directly reduce your tax burden by effectively giving you a refund. There are dozens of tax credits in the tax code. Some of the more common, subject to eligibility, are the child care credit, foreign tax credit, American Opportunity tax credit, and Lifetime learning tax credit. Your state may offer tax credits as well.

Capital Gains and Capital Losses

Another common point of confusion is the capital gains tax rules. Due to the character limit, I will direct you to this page from which explains things very well.

You cannot claim unlimited tax-free long term capital gains in the 15% tax bracket – only the amount required to “fill up” the 15% bracket is exempt from tax. Any long-term capital gains past that would be taxed at the 15% rate.

Other Taxes

Several other taxes you will or may be responsible for paying, and will see withheld from your paycheck:

  • State/local taxes – rates vary by state and locality.
  • Old Age, Survivors, and Disability Insurance – 6.20% up to $113,000 in taxable income in 2013, 6.20% up to $117,000 in taxable income in 2014.
  • Medicare – 1.45% on your entire taxable income. If you are a high earner you may have to pay an additional 0.9%.

Frequently Asked Questions about Taxes

Should I see someone about my taxes?

Even if you’re itemizing your deductions, the majority of people that ask this question in /r/personalfinance are likely capable of filing their taxes themselves. Tax situations that may merit seeing a professional would be a small business, multiple state residencies/income, or overseas tax issues (foreign tax credit, foreign earned income exclusion). Tax preparation costs vary based on complexity and where you live, but most tax returns can be prepared by a professional for a few hundred dollars.

What tax software should I use?

TurboTax and TaxACT are the two most popular commercial suites. If your income is below $58,000 you can file your federal return for free directly with the IRS using freefile. Costs of state returns through the Turbotax and TaxACT cost $36.99 and $17.99, respectively. Both suites charge more for things like capital gains, rental income, etc.

I already filed my taxes. Can I still contribute to a Roth IRA?

Yes. Unless you’re eligible for the saver’s credit then your Roth contribution after you file your return but before the April 15 deadline will not affect your tax filing. Roth contributions are post-tax.

Why doesn’t the student loan interest deduction double for couples married filing jointly?

That’s just the way the tax code was written. The maximum you can deduct in student loan interest is $2,500 regardless of your filing status.

What’s the difference between a tax deduction and a tax credit?

Tax deductions reduce the amount of your income that is taxed, while tax credits reduce your tax burden directly. The amount your tax burden is reduced by a deduction is the amount of the deduction times your marginal tax rate. For example, a tax deduction of $1,000 for someone in the 25% tax bracket will save $250 on their overall tax burden. A tax credit of $1,000 will save $1,000 on their overall tax burden.

I screwed up a tax return for a previous tax year. What should I do?

You need to file an amended return, form 1040X. The IRS provides this guidance for filing amended returns. As the IRS notes, your state tax obligation may change based on your federal tax obligation. You may need to file an amended state return as well.


Taxes can be intimidating if you’ve never done them before, but most filings are fairly simple. Hopefully the information above answers some of your questions about the basics of the US tax system – please use the comments if you have additional questions.

Edit 04/12/2014: The Tax Policy Center has a great interactive Form 1040 and Schedule A page, in which you can get a brief summary of each line of the 1040/Schedule A by rolling your cursor over it.


Be the first to comment - What do you think?  Posted by FinanceDad - August 7, 2014 at 8:49 am

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A raise in salary may not be as big as you think to your pocket

I was recently promoted and got a salary bump, common I’m sure among people like me in their 20’s and getting into the workforce. What people sometimes fail to realize is that a large salary increase doesn’t necessarily have as large an impact as they would think. When I was promoted close friend politely asked me if I got a raise with the promotion and I told him I would be making $X more each month.

“Wow,” he said, “that’s great. If I made $X more every month…” and proceeded to list off things he would do.

Now, I’m not complaining about my promotion or my raise, I love my job. However, I would like people to be aware of things that have reduced my $X salary increase:

  • Income taxes. That extra money is taxed at the highest bracket of all my income.
  • Reduced deductions and credits. Because I’m making more now, I no longer qualify for a number of tax deductions and credits I did previously.
  • Exercise. I used to swim every day. Now that I have more work and responsibilities, I need to be in the office working when I would have been swimming. I’ve had to join a gym that’s open at crazy hours to get my exercise in.
  • Food. Healthy food and convenient food is expensive. With my reduced exercise and increased workload, I had to improve my eating habits to stay healthy.
  • Entertainment. Now that I’m in management, when I go out with the other managers, we go to higher end places. Additionally, I still socialize with my team and go out with them on occasion.
  • Travel. Now that more people are dependent on me, I can’t take vacation time whenever I want. When I go home for Christmas, it’ll be a last minute flight. I also work from home a lot less now, so I’m racking up the miles on my car and the gas bills.

These are specific to me, but I’m sure for many people, there are a lot of other things that require expenditures as well (maybe a new wardrobe, etc.). It can be expensive just to fit in and as superficial as it may be, from a career perspective, choosing to be the new promotion who does not “step up” into their new role can be unwise.

Edit: I should make it clear that I’m not complaining about my situation in any way. I’m completely happy with where I am and how I spend my money. This is more of an advisory for people like my friend who hear “new job with $X raise” and think “$X more in my wallet, time to go shopping!”

Edit 2: I in no way meant to imply that I am making less money or have less money than I did previously. My point is that the cost of maintaining the same standard of living I was previously enjoying increased due to increased job constraints. These and other factors can chip away at the seemingly large sum of extra money one receives as when their salary increases with a new job or promotion.

Be the first to comment - What do you think?  Posted by FinanceDad - at 8:39 am

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Buying a car from dealer – tips from an ex-salesman


  • Browse without a salesman first. Get an idea for what you want. Do you want a small car, an SUV, a truck? Two rows, three rows? Automatic, manual? What special features do you want? Knowing what you want is the first step to finding the car you need. Go to a few dealerships at night or on Sundays. If you want to go during the day simply telling the salesman you don’t need help might not be enough to get rid of them, telling them you have a car in service for an oil change usually works.
  • Read Reviews. Once you have an idea what you like, looking online for reviews helps you to narrow down the field.
  • LOOK ONLINE! Almost all dealerships put very good prices on the internet. They know that if you are looking at their website you are probably also looking at the dealership down the road. They must be competitive online to get you in the door.
  • LOOK ONLINE!!! This will give you a good price point to start figuring out what you can afford. Don’t get sucked into a car you can’t afford by a good salesman. Find the car you want at the price you want and stick to it.
  • Take a good test drive. When you go on a test drive feel the car, listen to the car, pay attention to the car. That hum that the salesman says you won’t notice over the radio will be getting on your nerves 6 months from now. That rattle and bump, it’s going to be a problem. This is even more important on a used car. Use everything you see, hear, and feel later in your negotiations.
  • Try to find a car without add-ons. That Jeep with a lift kit, the sports car with an aftermarket spoiler, the truck with the big tires. The dealership adds this things on to add on to the price. This just makes it even harder to figure out exactly how much the car costs the dealer. These accessories are marked up excessively, so either look for a car without them or negotiate the accessories separately. (It will almost always cost you less to get the accessories put on afterward)
  • Don’t let them nickel and dime you. That $22,000 Truck you saw online, well now it has pinstripes ($300). VIN etched into the glass ($800). Fabric stain protectant ($500). Rust undercoating protectant ($900) and a spray in bed-liner ($1500). Now your 22,000 Truck is $26,000. Just like the accessories these are much less expensive done after you leave the dealership (even if you come back to have them done). Thanks /u/IvanTheTerrific


  • Look up the Rebates online.  Some dealerships will try to hide the rebates that are available and act like they are just taking that money off the car.  Knowledge is power, and if you know what the rebates are then you can quickly figure out the exact dealer discount being offered.  Also, check if you qualify for a military, student/teacher, or other rebates.
  • Don’t look at the Invoice. Many salesmen and dealerships flaunt their invoices. This is a tactic to make you think you are getting a good deal. The Invoice might say they paid 22,000 for a car however there are small things that you probably wont see, such as the Hold Back (this is an amount the dealership gets back from the manufacturer once they sell the car)
  • Don’t Look At The Invoice! Dealerships get bonuses from the manufacturer monthly, quarterly and annually according to sales volume. They know about how much that bonus is going to be and base their prices accordingly.
  • DON’T LOOK AT THE INVOICE!!! Seriously, The dealership is not going to lose money on the car they are selling. Everything is a numbers game, and they can make the numbers say whatever they want.


  • The salesman likely knows as much as you do. While the salesman might know a small amount more than you they are likely not experts on the used car you are looking at. Most used cars are purchased at auction. Even on the cars that were trade-ins the salesman has no way of knowing how the car was driven, if it had hidden mechanical issues etc.
  • Do your homework. Asking for a CarFax is always a good thing. They are not 100% accurate but you can bet that when you try to resell it the dealership is going to look at the car-fax and use it against you in negotiations. CarFax does an alright job but you always still need to…
  • Inspect the car. How does the outside look? Is the paint chipped or bubbling? Is the plastic fading? Get on your stomach, is the bottom rusting? How about the inside… Is the carpet stained? Any distinct odors? Are the buttons fading, bubbling, cracking, or in any way discolored? Seriously, this is what the dealership is doing to your car. They are looking for any reason to knock down the price they will pay as low as they can. You should be doing the same.


  • Negotiate online. While negotiating over email might not sound the most appealing it will likely get you the best deal. It will also save you the 4+ hour day at the dealership if the salesman can already have all your paperwork ready and the car prepped before you even get there.
  • Negotiate with multiple dealerships. Negotiating with multiple dealerships at once forces the hand of the dealership. Make sure you are talking about a car with a very close MSRP and have at it. This is done easiest via email and they will likely do whatever it takes to get you into the door (it’s also nice to have written copies of everything the salesman says).
  • Never negotiate payments. The total price of the car matters the payments don’t. You can make the payments almost anything you want once you agree on a price. (if your salesman tries to use a 4 square ask for a breakdown of the price)
  • Don’t jump at 0% Rates. Usually you are giving up a pretty substantial rebate to get the 0% rate. If you already have financing set up at a reasonable rate you are usually better off paying the small interest rate and taking the larger rebate.
  • Always bring your own financing. You don’t have to use it, in fact the dealership might have a better rate for you (Don’t use 0% though). If you already have financing lined up it makes knowing what interest rate you deserve easier. Say the dealership gets you a 2.9% rate, they will likely tell you they got you approved at 4.9% this is called marking up 2 points. (In the state I worked there was a 2 point limit, I believe in other states it may be higher)
  • Use the dealership financing. If you already have your own financing the dealership will do what they can to get you to finance with them because they get a kickback from the bank. Use this to your advantage. If you were approved at 3.9% from your bank and the dealership only offers to match it, ask them to take another $100 or so off the car if you finance with them. It is worth it to them in the long run.
  • Don’t Use KBB (or other similar sites). Kelly Blue Book is an interesting website. While some of the information on it is quite good, other things aren’t. As far as pricing a car they are pretty bad. KBB isn’t going to buy your car, and they also aren’t going to sell you a new one. Prices change daily on cars, and even more so fluctuate differently by region and they simply don’t keep up. Your 4WD car might be great in the snow up north, but people in the deep south have no use for it. Just as a convertible wouldn’t be a big seller up north. For this reason their numbers tend to be off. Sometimes by 500 dollars, other times by $5,000 or more. If you have a trade in, look online to see what similar cars (model, class, features, miles, etc.) are selling for and then make sure you…
  • Go to CarMax. Don’t sell CarMax your car at first, just get a quote. This will be useful at the dealership when you are trying to…
  • Negotiate on Price. Don’t worry about how much they are giving you for your trade in, negotiate the price of the car, then worry about the trade in. You already know what your car is worth, and if the dealership won’t pay it, CarMax will.
  • Get your keys back before you begin to negotiate. If you have a trade-in the dealership is likely going to need your keys to appraise your car. Get them back as soon as possible, otherwise you wont be able to…
  • Walk out the door. Don’t threaten, just do it. If you were close to a deal but they are no longer willing to budge, walk our the door. There is a 90% chance the sales manager will be at your car before you are. The sales manager is the only person who can change the price. Most salesmen don’t even get to see the cost of the cars they are selling.
  • Additional Warranties. Additional warranties can be a good thing but you should decide if you want them before you walk into the dealership. As is everything else in a dealership they are negotiable. In fact, if you did all your negotiations online, you can likely get the finance manager to negotiate the warranties and other services online as well. If you are still between a couple dealerships at this point negotiating between them can save you big money as this is where the dealership makes a large portion of their money.


  • They do this every day. While many salesmen are very honest people some are not. Even the honest ones know what buttons to push and what documents to show you to get you to buy. They do this every day, you do not.
  • The Salesman is your ally. Although many people see the salesman as their mortal enemy, the truth is the salesman wants to do whatever it takes to sell you a car. On new cars usually the sales staff makes a flat rate per car. For that reason they would sell you the car at a huge loss if they could, because it doesn’t effect their income one bit. Thanks /u/ChristopherSquawken

*ADDED 0% Interest and KBB sections

**ADDED Read Reviews, Nickel and Dime, Rebates, and Salesman is your ally sections.

article here:


Be the first to comment - What do you think?  Posted by FinanceDad - at 8:34 am

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Just graduated college, up to eyeballs in debt – Here’s some help for you

Example: “Just graduated with $50k in debt and will be starting a $60k job in 3 weeks, where do I begin?”

Here are a few guidelines I’m hoping will help 90% of the recent grads –

  • Live frugally. Spend as little as possible. You owe a lot of money to something, act like it. If you don’t grab it by the horns now, it could haunt you for years to come.
  • CREATE A BUDGET YNAB is great, or Mint.
  • Stick to your budget!
  • Allocate money to and IRA/Roth IRA/401k if possible. This will depend on your interest rates. Generally, if the interest is lower than 4% you could benefit more from putting money in an investment account. Remember, putting money towards a 6% loan is a guaranteed 6% return. Another thing to remember is that if your company matches 401k, then you should contribute at least the amount that they match. This will net you a 100% return on your money!
  • Build an Emergency Fund with 3-6 months of expenses
  • HERE is a great info-graphic of how to allocate money. (I believe /u/BrainSturgeon created this info-graphic, so credit to him!)

Check the sidebar, there is a lot of great information there.

I’m sure I am forgetting some things, if anyone else would like me to add to this, please let me know!

If you believe your situation is different, feel free to post a comment below and we can try to help!


Excellent Loan information from user /u/EducatedRisk – Original post, with links to sites, can be found HERE

Recent graduates should be aware of all their student loan repayment options. Most federal loans qualify for certain loan forgiveness programs, interest benefits, and flexible repayment options. All students with student loan debt should take all these options into account as part of their financial planning.

Use StudentLoans.Gov’s Repayment estimator – ED just rolled out a feature that will take your actual loan balances and project your monthly costs for each repayment program, the total balance and interest paid over the lifetime, and potential forgiven loan balances. You can also now just log into and you can review all your federal student loan balances (and each loan’s current status).

Any borrower that does not have a job at graduation should immediately enroll in Income-Based Repayment or Pay As You Earn. This provides more payment flexibility as you search for a job. Its better than a deferment or forbearance too. Even if you plan on making extra payments, the flexibility of PAYE and IBR can benefit most borrowers.

Income-Based Repayment – You pay 15% of your discretionary annual income divided into 12 monthly payments. If you have less ~$20k in income, your payments are generally $0/month. Interest still accrues but it is not capitalized.

Pay As You Earn – It has the same terms as Income-based Repayment except that you only pay 10% of your income. Also, this is only available to borrowers that did not have federal loans before Oct. 1, 2007 and who also had a NEW loan disbursed after Oct. 1, 2010 (confusing, I know). Here are some other common questions as well:

Federal Loan Consolidation – For federal loans, the monetary benefits for consolidation are minimal; the interest rates are averaged and there basically is no discount. When the loans are consolidated, you cannot target the highest interest rates with extra payments. Only consolidate for peace of mind and a simplified process but, generally, consolidation is not worth it for borrowers.

Capitalization of Interest – When a borrower graduates, some loans have accrued interest that is unpaid. The interest is capitalized when you graduate (added to balance of the loan). ED and your loan servicer will send letter recommending your make payments on the Uncapitalized Interest before it is capitalized. If you do, then that portion of unpaid interest is never charged interest over the life of your loan and you save money. If you can, make payments on the uncapitalized interest during your grace period. It is a good way to save money if you have extra savings and a job.

Grace Period – Direct Loans have a 6 month grace period from graduation; then borrowers have to make payments. Perkins Loans have a 9 month grace period. You can make payments before that if you want. Refinancing With Private Loans – There are number of companies out there that specialize in refinancing and consolidating private and federal loans. Each company is different but generally the lowest I have seen for refinancing is ~5% for borrowers with good credit. Keep in mind, however, that you lose access to loan forgiveness, IBR and PAYE if you refinance with private loans.

I am only mentioning these student loan issues because these decisions made right after graduation can have a huge positive or negative impact your personal finances for years to come.

For more information related directly to Student loans, check out /r/studentloans!

this was found here:

Be the first to comment - What do you think?  Posted by FinanceDad - at 8:31 am

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